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Annual credit sales of Nadak Co. total $680 million. The firm gives a 2% cash discount for payment within 10 days of the invoice date:
Annual credit sales of Nadak Co. total $680 million. The firm gives a 2% cash discount for payment within 10 days of the invoice date: 90% of Nadak's accounts receivable are paid within the discount period. Required: a. What is the total amount of cash discounts allowed in a year? (Enter your answer in millions rounded to 2 decimal places.) Total amount million b. Calculate the approximate annual rate of return on investment that Nodak Co.'s cash discount terms represent to customers who take the discount (Assume a credit period of 30 days and 360-days year). (Round intermediate calculations to nearest whole percentage.) 6 ROU % On January 1, 2019, the balance in Kubera Co's Allowance for Bad Debts account was $25,160. During the year, a total of $65,700 of delinquent accounts receivable was written off as bad debts. The unadjusted balance in the Allowance for Bad Debts account at December 31, 2019, was $30,440. Required: - What was the total amount of bad debts expense recognized during the year? (Mint Make a T-account for the Allowance for Bad Debts account) Bad debt expenses b. As a result of a comprehensive analysis, it is determined that the December 31, 2019 adjusted balance of Allowance for Bad Debts should be $61,600. Show the adjustment required in journal entry format. Of no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
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